SC orders return of PhilHealth excess funds

THE Supreme Court (SC) has ordered the return of P60 billion in excess PhilHealth funds that were previously transferred to the National Treasury.

In a statement, SC spokesperson Camille Ting said that in an order penned by Associate Justice Amy Lazaro-Javier, the Court also permanently prohibited the transfer of the remaining P29.9-billion fund balance from PhilHealth to the National Treasury.

She said the funds should be returned to PhilHealth through the 2026 General Appropriations Act (GAA).

The Court also declared void Special Provision 1(d), Chapter XLIII of the 2024 GAA, which authorized the return of the fund balance or excess reserve funds of government-owned or controlled corporations (GOCCs) to the National Treasury to fund unprogrammed appropriations under the 2024 GAA.

It likewise voided Department of Finance (DOF) Circular No. 003-2024, which directed the transfer of P89.9 billion to the National Treasury, representing the fund balance or excess reserve funds of PhilHealth.

According to the SC, both orders were implemented with grave abuse of discretion amounting to lack or excess of jurisdiction.

The court noted that under Section 11 of the Universal Health Care Act (UHCA), PhilHealth is required to maintain reserve funds up to a ceiling equivalent to two years of projected program expenses.

It said PhilHealth must set aside part of its net income as reserve funds each year, and any unused funds must be invested so that earnings are added back to these reserves.

“If the reserve funds exceed the ceiling, the excess must be used to increase benefits under the National Health Insurance Program (NHIP) and reduce members’ contributions. Section 11 also expressly provides that no portion of the reserve fund or its income may be transferred to the National Government or any of its agencies,” the SC said.

“The SC ruled that reallocating PhilHealth’s supposed ‘excess reserve funds’ through Special Provision 1(d) and DOF Circular No. 003-2024 makes compliance with Section 11 impossible. These measures undermine the very nature of PhilHealth funds as pooled resources for social health insurance, hinder the UHCA’s goal of delivering comprehensive and universal healthcare, and ultimately violate the people’s right to health and to an affordable, sustainable, and accessible public health insurance,” it added. (TPM/SunStar Philippines)